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Former GIC chief economist ridicule clarification of supposed S$270 million loss by HDB on BTO project as “disingenuous and misleading”

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CORRECTION NOTICE:

This article contains false statements of fact. For the correct facts, click here:
https://www.gov.sg/article/factually141022-b.


“A rather disingenuous and misleading analysis of the supposed $270mn loss made by HDB and by inference the government in developing BTO flats in AMK imho.” writes former GIC economist.

This was said by Mr Yeoh Lam Keong in a Facebook post on Tuesday (4 Oct) following news of the clarification made by Singapore Minister of National Development, Desmond Lee about how the Housing and Development Board (HDB) will incur an estimated development loss of about S$270 million from the Central Weave @ Ang Mo Kio Build-to-Order (BTO) project.

Mr Lee was responding to the parliament question filed by Non-Constituency Member of Parliament (NCMP) Leong Mun Wai on the questions of HDB’s net loss for the Central Weave BTO project at Ang Mo Kio; cost of land paid by HDB to SLA for this project; and net profit and loss position for the Government, including HDB and SLA, for this project.

Mr Lee said that the estimated development loss of about S$250 million for the project would increase to about S$270 million after considering the Central Provident Fund (CPF) housing grants given to eligible buyers.

He added that the estimated land cost for the project was S$500 million, determined independently by the chief valuer using market valuation principles.

“Land forms part of the past reserves, hence when HDB uses the land for development, the money that HDB will need to pay for the land must be paid back into the past reserves, which are invested and grown for future generations and are protected,” said Mr Lee.

The Minster emphasised that the Singapore government cannot use proceeds from land sales as revenue for spending in the budget and that HDB does not price new flats based on cost.

“HDB first establishes their market value by considering the prices of comparable resale flats nearby as well as the individual attributes of the flats and prevailing market conditions,” said Mr Lee.

“To derive the selling prices, HDB applies a significant subsidy to the assessed market values to ensure that new flats are affordable to those buying their first home.”

Mr Lee stressed that HDB incurs a “significant” deficit every year as the amount it collects from the sale of flats is “far less” than the cost of building and housing grant disbursements.

What sparked off Mr Leong’s parliament question might have been the recent Protection from Online Falsehoods and Manipulation Act (POFMA) correction direction issued by Mr Lee on Alternative View, a local social media page, for suggesting that HDB profited from the sale of the AMK BTO flats.

True Cost To The Government On BTO Projects After Subsidies Should Be Clearer

Commenting on the claimed loss by HDB, Mr Yeoh who worked in the Singapore’s sovereign wealth fund for 26 years said that the accounting sleight of hand being that the government acquired most of the land at minimal or much lower cost by compulsory acquisition.

He said that the advertised loss is only the opportunity cost of the state reselling the land at market price which it has psssed on to HDB, hence the “loss”.

Mr Yeoh argued that the true cost price should be the original book value of the land plus construction costs which on average is probably much lower than BTO prices before subsidy.

“The opportunity cost to the government of current higher land values should rightly go to HDB buyers to be true to the government and HDBs original mandate of affordable housing for all.”

He proposed that a more equitable, transparent and affordable way to price BTO flats should be factoring in construction costs plus a small premium for location available by ballot.

“If prices are much lower than resale flats then a longer minimum occupation period ( MOP) can be used to protect the market value of resale flats especially in prime locations as already the case.” said Mr Yeoh.

“The true cost to the government after subsidies will then be much clearer and BTO flats in all locations much more fairly affordable.”

Reform Of HDB Flat Pricing Needed; Singaporeans Channeling Significant Part Of Income To Pay Off HDB Flat

Mr Yeoh along with a few others at Future of Singapore, a non-partisan group submitted a proposal for a reform of the Singapore public housing policy in 2019.

On cost for new HDB flats, the group proposed that all new BTO flats be sold at around construction cost of $150-200 per square foot. Such flats will not be eligible for sale in the resale market for the first 15 years to help effectively safeguard the price of current resale flats. One family can only own one such flat at a time. Flat owners older than age 65 should also be allowed the option to downgrade once to a smaller, low cost BTO flat to further boost retirement adequacy.

The group noted in their proposal that the current cost of HDB flats for first time buyers of BTO flats relative to their incomes is very high, with the result that it typically takes about 25 years for home buyers to pay off their housing loans.

This effectively means that for the greater part of their working lives, many Singaporeans are channelling a significant part of their disposable incomes to paying off their HDB flats, leaving insufficient savings for retirement, medical expenses and education upgrading. The problem is exacerbated for the lower, irregular or uncertain incomes that makes home ownership difficult.

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TJC issued 3rd POFMA order under Minister K Shanmugam for alleged falsehoods

The Transformative Justice Collective (TJC) was issued its third POFMA correction order on 5 October 2024 under the direction of Minister K Shanmugam for alleged falsehoods about death penalty processes. TJC has rejected the government’s claims, describing POFMA as a tool to suppress dissent.

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The Transformative Justice Collective (TJC), an advocacy group opposed to the death penalty, was issued its third Protection from Online Falsehoods and Manipulation Act (POFMA) correction direction on 5 October 2024.

The correction was ordered by Minister for Home Affairs and Law, K Shanmugam, following TJC’s publication of what the Ministry of Home Affairs (MHA) alleges to be false information regarding Singapore’s death row procedures and the prosecution of drug trafficking cases.

These statements were made on TJC’s website and across its social media platforms, including Facebook, Instagram, TikTok, and X (formerly Twitter).

In addition to TJC, civil activist Kokila Annamalai was also issued a correction direction by the minister over posts she made on Facebook and X between 4 and 5 October 2024.

According to MHA, these posts echoed similar views on the death penalty and the legal procedures for drug-related offences, and contained statements that the ministry claims are false concerning the treatment of death row prisoners and the state’s legal responsibilities in drug trafficking cases.

MHA stated that the posts suggested the government schedules and stays executions arbitrarily, without due regard to legal processes, and that the state does not bear the burden of proving drug trafficking charges.

However, these alleged falsehoods are contested by MHA, which maintains that the government strictly follows legal procedures, scheduling executions only after all legal avenues have been exhausted, and that the state always carries the burden of proof in such cases.

In its official release, MHA emphasised, “The prosecution always bears the legal burden of proving its case beyond a reasonable doubt, and this applies to all criminal offences, including drug trafficking.”

It also pointed to an article on the government fact-checking site Factually to provide further clarification on the issues raised.

As a result of these allegations, both TJC and Annamalai are now required to post correction notices. TJC must display these corrections on its website and social media platforms, while Annamalai is required to carry similar notices on her Facebook and X posts.

TikTok has also been issued a targeted correction direction, requiring the platform to communicate the correction to all Singapore-based users who viewed the related TJC post.

In a statement following the issuance of the correction direction, TJC strongly rejected the government’s claims. The group criticised the POFMA law, calling it a “political weapon used to crush dissent,” and argued that the order was more about the exercise of state power than the pursuit of truth. “We have put up the Correction Directions not because we accept any of what the government asserts, but because of the grossly unjust terms of the POFMA law,” TJC stated.

TJC further argued that the government’s control over Singapore’s media landscape enables it to push pro-death penalty views without opposition. The group also stated that it would not engage in prolonged legal battles over the POFMA correction orders, opting to focus on its abolitionist work instead.

This marks the third time TJC has been subject to a POFMA correction direction in recent months.

The group was previously issued two orders in August 2024 for making similar statements concerning death row prisoners.

In its latest statement, MHA noted that despite being corrected previously, TJC had repeated what the ministry views as falsehoods.

MHA also criticised TJC for presenting the perspective of a convicted drug trafficker without acknowledging the harm caused to victims of drug abuse.

Annamalai, a prominent civil rights activist, is also known for her involvement in various social justice campaigns. She was charged in June 2024 for her participation in a pro-Palestinian procession near the Istana. Her posts, now subject to correction, contained information similar to those presented by TJC regarding death penalty procedures and drug-related cases.

POFMA, which was introduced in 2019, allows the government to issue correction directions when it deems falsehoods are being spread online.

Critics of the law argue that it can be used to suppress dissent, while the government asserts that it is a necessary tool for combating misinformation. The law has been frequently invoked against opposition politicians and activists.

As of October 2024, Minister K Shanmugam has issued 17 POFMA directions, more than any other minister. Shanmugam, who was instrumental in introducing POFMA, is followed by National Development Minister Desmond Lee, who has issued 10 POFMA directions.

Major media outlets, including The Straits Times, Channel News Asia, and Mothership, have covered the POFMA directions. However, as of the time of writing, none have included TJC’s response rejecting the government’s allegations.

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Hotel Properties Limited suspends trading ahead of Ong Beng Seng’s court hearing

Hotel Properties Limited (HPL), co-founded by Mr Ong Beng Seng, has halted trading ahead of his court appearance today (4 October). The announcement was made by HPL’s company secretary at about 7.45am, citing a pending release of an announcement. Mr Ong faces one charge of abetting a public servant in obtaining gifts and another charge of obstruction of justice. He is due in court at 2.30pm.

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SINGAPORE: Hotel Properties Limited (HPL), the property and hotel developer co-founded by Mr Ong Beng Seng, has requested a trading halt ahead of the Singapore tycoon’s scheduled court appearance today (4 October) afternoon.

This announcement was made by HPL’s company secretary at approximately 7.45am, stating that the halt was due to a pending release of an announcement.

Mr Ong, who serves as HPL’s managing director and controlling shareholder, faces one charge under Section 165, accused of abetting a public servant in obtaining gifts, as well as one charge of obstruction of justice.

He is set to appear in court at 2.30pm on 4 October.

Ong’s charges stem from his involvement in a high-profile corruption case linked to former Singaporean transport minister S Iswaran.

The 80-year-old businessman was named in Iswaran’s initial graft charges earlier this year.

These charges alleged that Iswaran had corruptly received valuable gifts from Ong, including tickets to the 2022 Singapore Formula 1 Grand Prix, flights, and a hotel stay in Doha.

These gifts were allegedly provided to advance Ong’s business interests, particularly in securing contracts with the Singapore Tourism Board for the Singapore GP and the ABBA Voyage virtual concert.

Although Iswaran no longer faces the original corruption charges, the prosecution amended them to lesser charges under Section 165.

Iswaran pleaded guilty on 24 September, 2024, to four counts under this section, which covered over S$400,000 worth of gifts, including flight tickets, sports event access, and luxury items like whisky and wines.

Additionally, he faced one count of obstructing justice for repaying Ong for a Doha-Singapore flight shortly before the Corrupt Practices Investigation Bureau (CPIB) became involved.

On 3 October, Iswaran was sentenced to one year in jail by presiding judge Justice Vincent Hoong.

The prosecution had sought a sentence of six to seven months for all charges, while the defence had asked for a significantly reduced sentence of no more than eight weeks.

Ong, a Malaysian national based in Singapore, was arrested by CPIB in July 2023 and released on bail shortly thereafter. Although no charges were initially filed against him, Ong’s involvement in the case intensified following Iswaran’s guilty plea.

The Attorney-General’s Chambers (AGC) had earlier indicated that it would soon make a decision regarding Ong’s legal standing, which has now led to the current charges.

According to the statement of facts read during Iswaran’s conviction, Ong’s case came to light as part of a broader investigation into his associates, which revealed Iswaran’s use of Ong’s private jet for a flight from Singapore to Doha in December 2022.

CPIB investigators uncovered the flight manifest and seized the document.

Upon learning that the flight records had been obtained, Ong contacted Iswaran, advising him to arrange for Singapore GP to bill him for the flight.

Iswaran subsequently paid Singapore GP S$5,700 for the Doha-Singapore business class flight in May 2023, forming the basis of his obstruction of justice charge.

Mr Ong is recognised as the figure who brought Formula One to Singapore in 2008, marking the first night race in the sport’s history.

He holds the rights to the Singapore Grand Prix. Iswaran was the chairman of the F1 steering committee and acted as the chief negotiator with Singapore GP on business matters concerning the race.

 

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